On Tuesday, the City Council approved changes to the Carlsbad Municipal Code (a collection of city laws) to establish a local Mills Act Program in the City of Carlsbad to encourage the restoration and preservation of historic buildings. The voluntary program will enable interested owners of historic properties to receive a break on their property taxes in exchange for their historic preservation and restoration efforts.

Here’s how it works:

• Owners of qualified historic properties who want to participate can enter in an agreement with the city to receive special tax savings.
• The basic requirement is that the owner agrees to preserve, rehabilitate and maintain the historical and architectural character of their property.
• Participation is voluntary – the program won’t impose any restrictions on owners of historic properties; it will simply be a new tool available to them if they want to use it.
• Properties that are 50 years or older will be considered eligible to apply for the program, with some exceptions.
• Each initial agreement is for 10 years and is automatically renewed each year, unless the owner or the city give notice they don’t want to renew.
• If the property is sold, the agreement is transferred to the new owner.

The City Council also directed city staff to work with the city’s Historic Preservation Commission to explore and develop additional incentives to encourage historic preservation throughout the city.

Background
The California legislature approved the Mills Act in 1972. It allows participating cities and counties to enter into contracts with the owners of qualified historic properties who agree to actively participate in their preservation, restoration and maintenance. In exchange, owners can receive property tax savings.

In July 2021, the City Council received a report regarding the city's possible acquisition of the Culver-Myers-Capp house (located at the southeast corner of Highland Drive and Oak Avenue) for historical preservation and directed staff to return to the City Council with more information about the Mills Act Program.

On Oct. 19, 2021, the City Council received additional information and directed staff to prepare a local Mills Act Program for City Council consideration at a future meeting.  A draft framework for the program was presented to the city’s Historic Preservation Commission in March 2022 and has been updated to incorporate input from the panel and the community.

Several other cities in the region offer the Mills Act Program including Escondido, San Diego, Chula Vista, La Mesa, Coronado and National City.

Next steps
The City Council will vote again on Nov. 8 to confirm the changes (it has to be approved twice, under city law). The ordinance will be effective 30 days following its adoption. Applications for the local Mills Act Program are expected to be available in January 2023.

More information
Staff report
Carlsbad Mills Act Program webpage